Tips on Analyzing and Driving Spa Revenue

By Elaine Fenard Partner & Chief Operating Officer, Europe and U.S., Spatality | February 22, 2010

The relatively young hotel and resort segment of the spa industry continues to develop and mature as guests become more spa savvy and managers are held responsible for achieving higher performance. As owners/developers invest more heavily in spa facilities, and property managers become more aware of spa revenue opportunities, everyone is taking notice of this once quiet sector. While simply having a spa doesn't necessarily drive revenue, being smart about its development and operations can mean the difference between a profitable spa and an amenity spa.

Analyzing the Business

First and foremost, tracking and measuring the appropriate data is critical for ultimately creating effective plans to drive revenue and increase operational efficiencies. Spa management software platforms are effectively transforming the industry, providing both on-site and remote management teams with the real time data necessary to understand the performance of the business on a daily basis. However, as with any system, its effectiveness relies entirely on the training and utilization of those using it.

Spa Management Software
First, the training. We have discovered that while many spas have some sort of spa management software, too often the spa's management team has little understanding of the complete functionality and possibilities of the system. To combat this, ensure that the software vendor provides comprehensive training in addition to convenient technical support services. They also should be available to provide annual refresher training, as well as assistance with any significant software updates. And before any training begins, it is important to have an idea of the specific date you wish to track and how this data will be used. Limited data can stall your understanding of the business, yet too much data or useless data is equally damaging. Identify the most pertinent data, and see that your system is set up to deliver it.

The Data
Using the correct metrics will provide great insight into the performance of your spa program relative to comparable programs within the industry. In an attempt to unify the industry, spa industry leaders have identified benchmarks and consistent metrics which allow managers to consistently track and compare performance against comparable programs and standards. Below are a few of these metrics.

Revenue per Square Foot (Meter)
Revenue per square foot is a meaningful metric that allows the spa program and facility to be measured on the basis of productivity given its space allocation. This information is particularly useful in benchmarking against comparable spa programs. A common ambiguity lies in what spaces are included/excluded within the total square footage, with spaces such as spa gardens and fitness areas falling within the grey area. Don't let this confound you. Determine first what areas of the spa are actually considered a part of the revenue-generating enterprise.

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